Asiamet Resources (LSE:ARS) sat at 6.6p on Wednesday after revealing that strong drilling results have taken it another step closer to completing a bankable feasibility study (BFS) for its BKM copper deposit in Indonesia.

The business said that the latest round of assay results received from infill and geotechnical drilling have confirmed its expectations for the deposit. It added that they also ‘further strengthen’ resource models at the site.

Highlights from the latest results include a hole called BKM31550-06 that delivered 19m at 1.16pc copper from a depth of 72.5m. This included 5m at 1.43pc copper from 82.5m depth and 2m at 2.61pc copper from 89.5m depth. Another hole called BKM31550-09 included 27m at 0.67pc copper from 57.5m depth. This featured 3m at 2.15pc copper from 80.5m depth.

Asiamet has now completed 37 resource evaluation holes and four geotechnical holes for 5,665m of diamond core drilling. It has received assays results for 32 holes, with the remaining nine expected before the end of the month. Once the company gets these, it will update its resource models at BKM, using this to generate first ore reserves for the BKM copper project.

Asiamet’s chief executive Peter Bird said the results strengthen the business’s position as it moved into the final phase of mine and process design to generate an initial ore reserve for BKM.

‘Upside potential in and around the BKM deposit remains very high and an external geological consultant with extensive experience in Indonesia has recently been engaged to further strengthen our understanding of the BKM geological system and develop a suite of additional high potential near mine Resource targets for testing in the next round of drilling,’ he added. ‘This work is currently under way and we look forward to providing an update on this target generation program shortly.’

The BKM BFS is expected to precede the delivery of a final feasibility study by the close of H1 2019 and first production by the end of the year. Asiamet has already carried out a preliminary economic assessment at BKM, which gave the site an after-tax NPV10 of $204m and after-tax IRR of 39pc. This calculation was based around a 25ktpa copper cathode heap leach operation to be carried out over an initial eight years.

BKM’s NPV alone dwarfs Asiamet’s current £66.2m (c.$87.6m) market cap considerably. What’s more, this figure doesn’t include the ‘district-scale potential’ Asiamet expects to be on offer in the area surrounding the project. This point was highlighted last month when institutional investor JP Morgan took advantage of a slump in Asiamet’s share price amid the resource market downturn to increase its stake to 9.37pc.

Author: Daniel Flynn

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